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Walmart

Essay by   •  March 2, 2011  •  341 Words (2 Pages)  •  1,041 Views

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Wal-Mart was started in 1962 when the discount retail industry was in the growth stages. Sam Walton, founder of Wal-Mart wanted to take advantage of the opportunity and establish a discount retail company. In the beginning the stores were started in the small towns in the south. During that time, it was considered as the least successful; however it has outgrown most of its competition. Sam's mission was to have an everyday low price discount retail store. Five years into founding Wal-Mart, Sam felt that he needs to expand before his competitors out run him. As a result he opened 19 stores with sales of $9 million dollars. Although Wal-Mart was under financed, it managed to have 30 stores in the 8 years. In order to sell the merchandise at a low rate, Wal-Mart's purchasing cost must also be at a low rate. However, suppliers and vendors were not willing to supply at the rate Wal-Mart was asking for. As result of this he built a warehouse so that merchandise can be bought at cheaper price and in large volumes. At the same time Wal-Mart needed to expand, but did not have enough capital. Sam decided to go public to raise capital. Over all, while his competitors were under the impression that Wal-Mart's business model will not be successful, Sam has taken the advantage of the time and strategically placed his business to grow. Sam was also able to convince his establish a internal culture in order have everybody on the same boat. This resulted in everyday low prices. He did not have any sophisticated systems, which resulted in less overhead cost.

Given its enormous growth, Wal-Mart's corporate strategy should be in terms of expanding into different markets. For example Wal-Mart can have a private equity/ Venture fund. Wal-mart has enough liquid capital to invest in different ventures. Another industry that Wal-Mart can invest in is the Manufacturing industry. This industry will not be an unfamiliar industry to Wal-Mart as they are in direct

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